Baidu thrives as Google Drive is blocked in China

Google’s chances of challenging old search foe Baidu in the Chinese market look even more remote, after the Chinese government blocked the Chocolate Factory’s much-hyped Google Drive service.

Launched to much fanfare on Tuesday, Google Drive is a Dropbox-like service which allows users to upload and share content in the cloud, integrating with Google Docs for those who use the online productivity suite.

Given that other foreign cloud services including Box, SugarSync, Apple’s iCloud and – no doubt most irksome for Google – Microsoft SkyDrive are reportedly all accessible from the People’s Republic, Google could have been forgiven for thinking it may have had a crack at the country’s huge online market.

That’s not the case though with reports flooding out that it had been blocked in China almost as soon as it was launched.

Whether this is a continuation of the spat which saw Google heavily criticise the government’s hardline censorship policies and relocate its search servers to Hong Kong in early 2010, or if there are other reasons – perhaps the integration with the already banned Google Docs, for example – will probably never be known.

The launch was reported on the English version of state-run Xinhua, incidentally, without a hint of irony and with no mention of the ban in China.

It’s certainly the case that cloud storage services like Drive could allow users to share large numbers of documents and photos with each other, potentially undermining the government’s ongoing efforts to censor the web and providing a particular headache for propaganda officials during contentious events such as the Communist Party leadership handover next year.

However, while Dropbox and Drive are blocked, others are allowed to function, for now.

One grateful benefactor will be Chinese search giant Baidu, which benefitted greatly from Google’s 2010 exit from China and now holds a commanding lead in the domestic search market.

Its newly launched WangPan service initially offered users 15GB of free storage, and although it is still in a limited beta, the firm is likely to place the service centre stage as it looks to build its presence in the mobile market.

Other home grown players will also benefit from the absence of arch-disrupter Google, of course, including gaming firm Shanda’s Everbox service, Yun.io and Kanbox.

All will be hoping to take a chunk out of a huge and growing market for cloud storage in a country with over 500 million online users.

Gartner estimates that consumer content stored in the cloud will grow from seven per cent in 2011 to 36 per cent by 2016, driven by the need to share content and access it on multiple devices.